One key challenge for DAOs is managing member identity and permissions in a decentralized way. Traditional organizations have centralized databases and hierarchies for determining roles, access control, and permissions. But DAOs aim to be decentralized communities, so relying on central authorities for identity and permissions management goes against their ethos. This is where decentralized identity solutions for access control come in.
Decentralized Identifiers (DIDs) and Verifiable Credentials
The foundation for decentralized identity management is having decentralized identifiers or DIDs. A DID is like a unique URI that points not to a website but to a DID document that describes the identity. These DIDs and DID documents are registered on blockchain or other decentralized networks rather than in centralized databases.
Verifiable credentials can then be issued and linked to a DID document. Verifiable credentials contain identity claims that can be cryptographically verified since they are digitally signed. For example, a credential may state that a certain DID identity has a “member” role in a specific organization. These verifiable credentials enable decentralized access control decisions.
Using DIDs and credentials, membership permissions can be managed for DAOs on-chain. Certain smart contract functions for voting or proposing changes could be restricted to identities that have a valid “member” credential signed by the DAO itself. This allows decentralized governance without centralized identity providers.
Managing DAO Roles and Capabilities
In addition to basic identity and membership management, more complex role-based access control policies could be implemented with verifiable credentials. Many DAOs have different roles like contributors, core team members, moderators, treasurers, etc. Specific capabilities can be linked to these roles.
By defining a rich vocabulary of credentials and claims around roles, capabilities, and permissions, DAOs can manage decentralized access control to various functions. For example, an identity could present a credential that proves they have the “treasurer” role to gain permission for withdrawing or depositing community funds. These credentials can be revoked or renewed by the decentralized organization as needed.
Technical Standards for Decentralized Identity
There are a range of standards that enable managing digital identity on blockchains and peer-to-peer networks rather than by centralized providers.
- Decentralized Identifiers (DIDs) – as outlined above, these provide globally unique identifiers independent of any centralized registry.
- Verifiable Credentials – provide a standard way to express credentials and proofs in a decentralized way.
- DID Communication – communication protocols for resolving and looking up DIDs on different networks.
- DID Auth – authentication protocols for proving control over a DID.
Together, these standards allow the contents of traditional identity systems like membership databases to be moved on-chain and managed in a decentralized way using DIDs and credentials. This enables permissioned access and roles for DAOs without centralized gatekeepers.
Example DAO Identity Management Approaches
There are a variety of approaches being explored for decentralized identity and access control for DAOs:
POAPs (proof of attendance protocols) issue non-fungible tokens when members participate in events. These can serve as credentials denoting membership. Certain DAO functions could then be restricted to wallets holding a valid POAP NFT for that community.
BrightID offers a social proofing mechanism for establishing an identity reputation in a decentralized way. DAOs could leverage BrightID to set policies based on degrees of identity confidence rather than centralized KYC.
The Ceramic network provides infrastructure for decentralized data streams describing identity and contexts. This can be used to maintain verifiable credentials and DID documents for DAO members used in permission decisions.
Veramo is an identity framework that bridges different blockchains and standards. It could allow DAOs to manage credentials across networks while keeping identities themselves decentralized.
Ethereum smart contracts
Custom smart contracts on Ethereum and other blockchains could govern permissions, track membership NFTs, encode DAO identity, and access logic directly on-chain.
The combination of decentralized identity standards and custom DAO governance contracts allows novel implementations for on-chain identity and access management that match the decentralized ethos of DAOs. Rather than centralized servers governing everything, cryptography, and community consensus can mediate access.
Ongoing Challenges for Decentralized DAO Identity
There are still significant challenges in realizing a decentralized identity for the management of DAOs:
Sybil Attacks: How do you prevent malicious actors from creating many identities and obtaining outsized influence?
User Experience: Managing keys, cryptographic proofs, and signatures adds complexity for average users.
Compliance: How do you balance compliance with regulations around “Know Your Customer” with maintaining decentralization?
Data Modeling: Standards are still emerging around defining verification claims, credentials, roles, capabilities, etc. in a consistent decentralized way.
Infrastructure: Seamless tools and infrastructure for decentralized credential issuance, revocation, and validation are still maturing across blockchain ecosystems.
Despite these challenges, decentralized identity represents perhaps the single most important enabler for realizing autonomous organizations not beholden to centralized platforms. The solutions outlined above show the path forward towards decentralized management of digital community access and permissions.
Decentralized autonomous organizations require decentralized identity and permission systems to manage member access and governance. This enables community autonomy and avoids reliance on centralized servers or providers. Decentralized identifiers and verifiable credentials are the foundation for managing access control and membership permissions in DAOs based on community-defined policies. Ongoing advances in decentralized identity standards, infrastructure, and integration with smart contract platforms will enable sophisticated implementations of roles, permissions, and credentials without centralized bottlenecks. The world of community coordination is shifting from hierarchies to networks. Decentralized identity is at the heart of empowering this evolution towards community autonomy and peer-to-peer governance.